Vultures enjoy a day at the beach. They eat fish stranded in shallow waters or dead ones washed ashore. Vultures serve a purpose disposing of carrion that could spread disease.
What purpose do market vultures have? Not to be confused with a vulture capitalist, a market vulture is as necessary to the market as a turkey vulture is to the environment.
For starters, scavengers help add liquidity to a trade. They happily eat the remains of a trade because they’re not necessarily concerned with the risk. They are in and out quickly.
I’m much more of a market hunter similar to an owl. I enjoy spotting and hunting stocks as prey. I stalk for days, weeks and sometimes months before picking off my prey. I wait until the risk of MY becoming the prey is limited. I wait until the meal appears satisfying enough to sate me for a long while.
However, once the trade is made, I wait for the scavengers to show up. If they don’t, I wonder why not? If they do, I wonder for how long?
Reexamining a few of the 10 Megatrends I chose back in December 2015 to track in 2016, let’s examine how the hunters and vultures might have made out.
In no particular order, I begin with Climate Change. I wrote to watch “Solar Energy, Raw Materials at risk, Electric Cars, China as a possible leader in Alternative Energy Technology.â€
To date, First Solar (FSLR), even after solid earnings, continues to struggle. Here, hunters who bought got burned while scavengers feeding on the carcass the hunters left behind fed well. Going forward, this hunter will remain on high alert as I still believe this megatrend will at some point, play out. And when it does, it will so for years.
Secondly, there’s Geopolitical Turmoil. For that one I wrote, “Emerging Markets, Raw Materials at risk (including oil), Defense companies and Cyber Security (At Risk-Big Banks), Impact on Travel-Hotels, Airlines and Cruise Linesâ€
Hunters and scavengers both ate well on many but not all of these predictions. Emerging Markets are on new 2016 highs. Oil is trying once again for a bottom. Cyber-Security, looking at HACK the ETF, is close to the 2016 high of 26.47. Many Airlines and Cruise Lines continue to do quite poorly.
